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WASHINGTON—The U.S. and China have reached a deal that will allow telecommunications company ZTE Corp. to continue to do business, requiring it to pay a $1 billion fine and place U.S. enforcement officers in the company to monitor its actions, Commerce Secretary Wilbur Ross said Thursday.
According to Mr. Ross, speaking on CNBC, ZTE must change its management and its board, pay the fine, and put $400 million in escrow, which it will forfeit if it violates U.S. sanctions on North Korea and Iran. In addition, he said, “we still retain the power to shut them down again,” if the U.S. finds the company doesn’t abide by the settlement terms.
The article goes on to state the following:
Mr. Ross said the compliance team would be staffed by Chinese-speaking U.S. agents and would report to ZTE’s new management as well as the Commerce Department. The compliance team will stay with ZTE for 10 years. But critics of the deal doubt that will be sufficient to keep tabs on the company’s actions.
Mr. Ross said that the ZTE deal isn’t part of the overall trade fight between the U.S. and China. It is far from clear that the agreement will forestall the U.S. from assessing tariffs on $50 billion of Chinese goods after June 15, as the U.S. has threatened.
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